Thursday, December 22, 2011

What other Rules to "benefit" the public will be announced while people are enjoying the season and not looking?

EPA Tries To Pull a Fast OneBy Diana Furchtgott-Roth

RealClearMarkets.comDecember 22, 2011.

You're a savvy political appointee, and you're bringing out the Mercury and Air Toxic Standards for Power Plants rule that will raise electricity rates all over the country, particularly in battleground states of Illinois, Ohio, Indiana, Florida, and Michigan. What can you do to get the public to swallow the costs?

Timing is everything, and you choose the Wednesday before Christmas, when most people aren't paying attention.

And then you schedule the announcement at a place designed to tug at the heartstrings, say the National Children's Hospital in Washington D.C. You ask the hospital's CEO and the national volunteer chair of the American Lung Association to make remarks.

You say that this costly initiative is for the children, and that millions of children will be protected. You talk about how 15 years ago your son spent his first Christmas in hospital, suffering from asthma.

Of course, you say nothing about the costs. Your state-by-state interactive map shows benefits for each state, but no costs. (These are buried in the 510-page Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards report.) And you throw in some job creation for good measure, 46,000 new construction jobs and 8,000 utility jobs.

Environmental Protection Agency Administrator Lisa Jackson is one smart politician, and that's what she did yesterday.

It's too bad that the Regulatory Accountability Act of 2011, the brainchild of Ohio Republican Senator Rob Portman, has not been made law. His bill would require a detailed analysis of the costs and the benefits, which would have saved Americans, including residents of his state, billions of dollars.

The Mercury and Air Toxic Standards for Power Plants rule would make electricity generation far more complex and expensive, especially in the eastern half of the United States. It would require the closure of many coal and oil fired power plants, and placement of emissions control equipment on others. Forty-five percent of American electricity is produced by coal.

EPA would restrict power plants' and boilers' emissions of "heavy metals," including mercury, arsenic, chromium, and nickel, and acid gases, such as hydrogen chloride and hydrogen fluoride.

Most people's eyes glaze over when they hear about EPA's new Utility Maximum Achievable Control Technology rule. But when they hear that it would raise their electricity bills, they start to pay attention.

Maximum Achievable Control Technology means that plants and boilers have to use the most stringent methods possible to get the heavy metals out of the air, even if these methods cost billions and the benefits are worth far less-as is the case with the new utility rule. That's why many plants will have to close.

Susan Dudley, director of the Regulatory Studies Center at George Washington University, has actually read all of the 510 page regulatory impact statement. She wrote in the National Journal on Monday, "If the enormous public benefits EPA predicts from these mercury standards were real, they would justify the cost to Americans of almost $11 billion per year. Unfortunately, they are not."

Dudley explains that EPA derives its benefits by assigning high values to reducing emissions of fine particles (not air toxics or acid gases) that will occur as a side-effect of the required controls on mercury. But EPA already regulates these particles through other rules. Through sleight of hand, EPA calculates almost all of the benefits for this rule from particle reductions that fall well below the levels it has already established as safe in other proceedings.

Mercury and arsenic are well-known to the public as toxic, and in certain doses can be lethal. But the new EPA rules would push emissions caps unnecessarily low, driving up generating costs and the price of power to industry and households, and forcing some boilers and plants to shut down.

EPA estimates its new rules would cost households and businesses $10 billion a year in 2016. Industry groups have estimated the costs at $40 billion to $120 billion for full compliance, with many older coal and oil-fired plants forced to close. Illinois, Ohio, Indiana, Missouri, and Michigan are the hardest-hit, because they are home to the oldest plants with the fewest emissions controls.

These additional costs would come on top of those to be imposed, starting around 2015, by EPA's other planned standards for carbon, water, coal ash, and particulates.

The benefits, calculated at $33 billion to $81 billion each year, starting from 2016, supposedly come from improvements in Americans' health, mostly from decreases in asthma. But these projected benefits are "guesstimates," gains that are hard to specify given that other factors, such as obesity and lack of exercise, are in play.

These vast projected savings from asthma make no sense. America's air has been gradually getting cleaner since 1980, as EPA's own data show, but the number of children with asthma has risen. According to the Centers for Disease Control, 3.6 percent of children had asthma in 1980, and almost twice the percentage, 7.5 percent, in 1995.

In 2009, using a slightly different measure, 10 percent of children had asthma. CDC acknowledges that "the causes of asthma remain unclear and the current research paints a complex picture." Yet on Wednesday EPA forecast 130,000 fewer asthma cases from its new rule, mostly from fewer particulates.

Mr. Portman no doubt knows what the new EPA regulations will do to Ohio, and his Regulatory Accountability Act of 2011, cosponsored with Senator Mark Pryor, an Arkansas Democrat, seeks to check agencies such as EPA. The House companion bill, introduced by House Judiciary Committee Chairman Lamar Smith of Texas and Democratic Representative Collin Peterson of Minnesota, passed with a 253-167 vote on December 2, 2011.

The bill would provide greater transparency and cost-benefit scrutiny to the most expensive rules, and would require the least burdensome option, rather than the most expensive. In addition, it would require a more rigorous process for costly rules, including formal hearings, at which substantive evidence would have to be provided.

The bill requires cost-benefit analysis to be undertaken at each step in the rulemaking process (proposed rule, final rule, and judicial review), and requires high quality data to be used in the analysis.

Following the analysis, agencies are required to select the "least costly rule considered during the rule making...that meets relevant statutory objectives" unless ‘‘the additional benefits of the more costly rule justify its additional costs." The bill establishes a more rigorous standard of judicial review regarding costly rules (those with an estimated impact of $1 billion or more), such as the mercury rule.

There are five more government business days before the end of the year. Who knows what other rules will emerge before 2012?

Our nation’s economic growth may finish an anemic 2% on the year. Faced with looming taxes and regulations, few companies are expanding, hiring or buying equipment. More than 14 million Americans are unemployed, excluding the nearly 9 million who have been forced to take part-time jobs, or the 2.5 million who’ve given up on finding work.

Meanwhile, 140,000 have been added to government payrolls, and the nation is spending $4 billion a day more than it’s taking in.

That is unacceptable, demoralizing – and unnecessary.

The White House and Democrats are clueless about reinvigorating the economy. But they have proven they know how to kill jobs, prosperity and hope. Their energy policies are especially destructive.

As President Obama made clear, under his tutelage electricity costs would “necessarily skyrocket,” gasoline prices would soar, “green” energy would become the law of the land, and he would “fundamentally transform” America. He is keeping his promise.

America’s vast storehouses of untapped oil, gas, coal and uranium could generate millions of jobs and hundreds of billions in revenues. Electricity generation industries and the factories and other businesses that depend on reliable, affordable energy could do likewise, if they were unshackled from excessive regulations that often actually harm health and environmental quality.

Instead, the Environmental Protection Agency, Departments of Energy and the Interior, and other government bureaucracies continue to impose a near-total shutdown of onshore and offshore oil and gas leasing. They drag their feet or simply reject drilling permits, display antipathy toward hydraulic fracturing to tap our 100-year supply of shale gas, and impose truckloads of punitive air and water rules designed to shutter dozens of coal-burning power plants.

The President claims he will “pare back regulation” by several billion dollars – out of an estimated $1 trillion in total annual regulatory compliance costs. EPA alone promised “$126 million” in supposed paperwork reductions, while imposing several hundred billion dollars in new EPA regulations.

Mr. Obama finally suspended EPA’s proposed ozone rules, which many had warned would be the most expensive environmental edicts in history. But they will be back with a vengeance after the 2012 elections. Meanwhile, bowing to EPA and environmentalist pressure, he postponed action on the Keystone XL pipeline, which would have created 20,000 almost-shovel-ready construction jobs.

Now EPA wants 230,000 new bureaucrats, just to process future carbon dioxide emission permits, based on bogus climate chaos models and scenarios. Even our worst nightmares cannot fathom the job-killing compliance costs this would impose on the 6,000,000 businesses these regulations would affect.

Again using questionable-to-fraudulent assertions about catastrophic manmade climate change to justify its actions, EPA is also demanding 54.5 mpg fuel economy standards – which will result in thousands of deaths and millions of injuries, as cars are further downsized and plasticized.

Even businesses on the leading edge of the “green revolution,” crony capitalism and lobbying for dollars are faring poorly. After lapping up $1.5 billion in government red-ink subsidies and loan guarantees, three US solar companies filed for bankruptcy and fired over 2,000 workers. And still the Energy Department shoveled more billions of tax dollars into more wind and solar projects, despite voter objections.

DOE also sponsored programs that cost $20 million to create 14 jobs and weatherize four Seattle houses in a year. It spent $80 billion to create 225,000 “clean energy” jobs – at $356,000 apiece. It shells out $6 billion a year to grow corn on an area bigger than Indiana, and convert it into ethanol that gets a third less mileage per gallon than gasoline.

This isn’t “green” energy. It’s “greenbacks” energy. It requires perpetual infusions of taxpayer money, confiscated from hard-working, productive sectors, and given to companies that have better political connections. That is unconscionable and unsustainable.

America must promote and permit projects that actually generate energy, jobs and revenues. It must reward and encourage companies that provide affordable 24/7 energy to power virtually everything we make, grow, transport and do.

Unleashing America’s vast supplies of shale oil and gas, conventional petroleum, coal and nuclear energy isn’t a magic potion. But it is a vital part of the solution to what ails our nation.

The petroleum industry alone currently supports some 9.2 million jobs, but could do much more. Recent studies by Wood McKenzie, ICF International and other analysts conclude that opening currently off-limits onshore and offshore areas could generate an additional $800 billion in government revenues and another 1.4 million jobs, by 2030. That includes primary jobs for roughnecks on rigs; secondary jobs in steel making, construction, pipelines, refineries, transportation and other sectors; and indirect jobs in hotel, restaurant, retail and other sectors that benefit from the increased energy, payrolls and economic activity.

We could do likewise with coal, nuclear and hydroelectric projects.

We need American energy for American jobs – tapping resource bounties to help balance the budget, drive down unemployment and get the country going again.

We can and must protect human health and environmental quality – from real threats, not exaggerated, speculative or computer-generated threats. We can and must do so without raising energy and business costs even higher, killing more jobs, and stifling private sector and government revenue opportunities.

Over-regulation brings energy poverty and blackouts, destroys jobs, impairs families’ living standards and nutrition, leads to foreclosures and homelessness, increases stress and alcohol abuse, makes it harder for families to afford proper heating and air conditioning, and harms people’s health and welfare.

Those impacts must be fully considered, along with putative benefits of current and future regulations. If laws and rules don’t pass muster, they need to be rewritten, rejected or repealed.

Subsidies do not create jobs. Getting overzealous government out of the way, ending government deficit spending, letting business work within a sensible regulatory system, ensuring that companies have the affordable energy they need – that creates permanent, sustainable jobs and brings renewed prosperity. That generates revenue streams that curb the need to raise taxes on productive companies and workers.

As election year 2012 dawns, voters must demand that presidential and congressional candidates explain how they will reform our legal and regulatory system, to tap US energy bounties, while protecting environmental values from actual risks, and ignoring exaggerated, imagined and invented dangers.

Unaccountable politicians, bureaucrats and environmental ideologues have strangled our economy long enough. We the People must now lay the foundation for producing more domestic energy, creating jobs, and ensuring that our children can look forward to a brighter future.

American energy can ignite America’s renewal, and restore American jobs, opportunity and prosperity. Voters need to send Congress, the White House and EPA a message:

We need American resources for an American recovery. Slash the crippling regulations. Drill here in America. Produce affordable energy to create jobs and fix our economy. Do it now!

__________

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and author of Eco-Imperialism: Green power - Black death.

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Dennis T. Averyhas been quoted in publications ranging from Time and The Washington Post to The Farm Journal. His article, “What's Wrong with Global Warming?” was published in the August 1999 issue of Reader's Digest. With S. Fred Singer, Avery is the coauthor of Unstoppable Global Warming; Every 1500 Years. He travels the world as a speaker, has testified before Congress, and has appeared on most of the nation's major television networks, including a program discussing the bacterial dangers of organic foods on ABC's 20/20. Avery studied agricultural economics at Michigan State University and the University of Wisconsin. He holds awards for outstanding performance from three different government agencies and was awarded the National Intelligence Medal of Achievement in 1983. In addition to lending his expertise to CARE as a member of the Energy Counsel, Dennis Avery currently serves as Director, Center for Global Food Issues and is a Senior Fellow for the Hudson Institute is a non-partisan policy research organization dedicated to innovative research and analysis that promotes global security, prosperity, and freedom.

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Robert L. Bradley, Jr. is one of the nation’s leading experts on the history and regulation of energy and related sustainable development issues. He has presented professional testimony on energy issues to the California Energy Commission and United States Senate; his opinion-page editorials on energy policy have appeared in the New York Times and many other newspapers across the country; his energy views have been aired on National Public Radio, Voice of America, CBS Radio Network, and Armed Forces Radio, as well as local programs. Bradley is a multi-published author whose most widely read book is Energy: the Master Resource (with Richard Fulmer). His newest is Capitalism at Work: Business, Government and Energy. He holds a B.A. in economics, a masters in economics from the University of Houston, and a Ph.D. in political economy from International College. Bradley is a member of the International Association for Energy Economics, the American Economics Association, and the American Historical Association. He is CEO and founder of the Institute for Energy Research in Houston; visiting fellow of the Institute of Economic Affairs in London; an adjunct scholar of the Cato Institute; and a member of the academic review committee of the Institute for Humane Studies at George Mason University.

Paul Driessen’scareer has included staff tenures with the United States Senate, Department of the Interior and an energy trade association. He has spoken and written frequently on energy and environmental policy, global climate change, corporate social responsibility, and on marine life associated with oil platforms off the coasts of California and Louisiana. Driessen received his BA in geology and field ecology from Lawrence University, JD from the University of Denver College of Law, and accreditation in public relations from the Public Relations Society of America. A former member of the Sierra Club and Zero Population Growth, he abandoned their cause when he recognized that the environmental movement had become intolerant in its views, inflexible in its demands, unwilling to recognize our tremendous strides in protecting the environment, and insensitive to the needs of billions of people who lack the food, electricity, safe water, healthcare and other basic necessities that we take for granted. Driessen is a senior fellow with the Committee For A Constructive Tomorrow and Center for the Defense of Free Enterprise, nonprofit public policy institutes that focus on energy, the environment, economic development and international affairs.

Michael J. Economidesis among America's leading energy analysts who regularly appears on national TV and radio programs. As a consultant, educator, and PhD petroleum engineer, Economides has done technical and managerial work in more than 70 countries. A professor at the Cullen College of Engineering, University of Houston, Economides has written or co-written about 200 articles and peer-reviewed papers and 11 textbooks. Economides is the Editor-in-Chief for the Energy Tribunemagazine. He is also the co-author, with Ron Oligney, of the industry primer, The Color of Oil: The History, the Money and the Politics of the World's Biggest Business, which was published in 2000 and has since been translated into five languages. CARE is honored to include Michael Economides as a member of the Energy Counsel.

Michael R. Fox, Ph.D., is a retired nuclear scientist and university chemistry professor. He is the science and energy writer/reporter for the HawaiiReport.com. A resident of Kaneohe, Hawaii, he has nearly 40 years experience in the energy field. His interests and activities in the communications of science, energy, and the environment has led to several communications awards, hundreds of speeches, and many appearances on television and talk shows. Dr. Fox is listed by the Heartland Institute as a global warming/climate change expert. He is also the Senior Fellow for Science at the Grassroot Institute of Hawaii. He can be reached via email at mfox@grassrootinstitute.org. Please visit Dr. Mike Fox's blog at http://www.foxreport.org/.

Byron King is the resident energy and natural resource expert at Agora Financial, LLC. A geologist by training, he worked for the former Gulf Oil Company and has followed oil industry developments for over 30 years. Byron’s career path also took him into the U.S. Navy, both active duty and reserve. In the 1990s and 2000s Byron engaged in a vigorous private law practice. For the past five years Byron has been writing about energy and natural resource issues for an international audience. Currently, Byron writes and edits two major publications, Outstanding Investments and Energy and Scarcity Investor. Byron holds degrees from Harvard, the U.S. Naval War College and the University of Pittsburgh.

Tom Tanton is the Principal of T2 & Associates, a firm providing consulting services to the energy and technology industries. Mr. Tanton has over 35 years experience in the energy, economy, and environmental fields.